3 indicted over money to feed kids

Provider to needy said to bribe DHS workers, skim $1M

Jacqueline D. Mills leaves the federal courthouse in Little Rock with one of her attorneys after her arraignment Thursday along with two other women, Gladys Elise King and Tonique D. Hatton, on charges of conspiring to steal money from U.S. Department of Agriculture programs.
Jacqueline D. Mills leaves the federal courthouse in Little Rock with one of her attorneys after her arraignment Thursday along with two other women, Gladys Elise King and Tonique D. Hatton, on charges of conspiring to steal money from U.S. Department of Agriculture programs.

Three Arkansas women were arrested Thursday on federal charges accusing them of stealing thousands of dollars from two programs intended to feed poor children across the state.

photo

U.S. Attorney Chris Thyer (right), at a news conference Thursday in Little Rock, discusses the federal charges against three Arkansas women accused of stealing thousands of dollars from two food programs. Joining Thyer are (from left) David Resch, FBI special agent in charge, Brian Marr, U.S. Secret Service special agent in charge, Lynn Ollar, senior inspector for the U.S. Marshals Service, and Kenya Carter, supervisory special agent with the Internal Revenue Service.

ADVERTISEMENT

More headlines

U.S. Attorney Chris Thyer said one of the women, Jacqueline D. Mills of Helena-West Helena, had transferred nearly $1 million -- out of $2.5 million she received through the state Department of Human Services to feed the needy children -- into her personal bank account or other bank accounts controlled by her.

Mills, 39, was charged alongside Tonique D. Hatton, 37, of North Little Rock, an employee of DHS, and Gladys Elise King, 34, of England, a former department employee.

Thyer said Hatton and King were the "gatekeepers" responsible for ensuring that federal funds used in the state-administered programs got into the right hands, and together took bribes of nearly $250,000 in checks alone from Mills and "others known and unknown" to a federal grand jury.

An indictment handed up last week by the grand jury and unsealed Thursday alleges that Hatton and King took the bribes from Mills to look the other way and allow her to improperly receive federal funds.

Thyer said the investigation leading to their arrests is ongoing and other department employees will "face additional scrutiny" in the next few months. He said that not only are more arrests possible but additional charges against the three women are possible as well.

Authorities decided to release information about the investigation, despite its not being over, in order to solicit information from the public about other people who might be carrying out similar schemes, Thyer said.

"We will leave no stone unturned in this investigation," he said, inviting anyone with knowledge about possible fraud to send an email to USAARE.FeedingProgramFraud@usdoj.gov.

In a news release, the Department of Human Services noted that more than a year ago it notified federal officials about possible fraudulent billing by Mills and that it has been working with investigators looking into other potentially false claims. Department officials later said internal reviews conducted after the agency began questioning Mills' unusually large reimbursement requests uncovered more "questionable invoices."

The department said that King was a Special Nutrition Program coordinator from May 2009 until December 2013, when she left the agency voluntarily. The release said Hatton was hired in June of 2001 and that DHS "has begun the process to terminate her."

Meanwhile, the department is placing Mills on a list of providers who are excluded from doing business with the department "until there is a resolution in her case." The news release notes that she wasn't paid for "questionable costs associated with her summer food sites in 2013" and was denied a request to be a provider this year.

"It's extremely disappointing to learn that people were reportedly cheating a program that feeds hungry children, especially in a state that has one of the highest rates of childhood hunger in the country," DHS Director John Selig said in the news release.

The federal agencies investigating the fraud include the Secret Service, the FBI, the IRS, the U.S. Department of Agriculture and the U.S. Marshals Service. Thyer said that what became a multiagency investigation began "on two parallel tracks" -- when the Secret Service received information in 2013 about suspicious expenditures and notified the FBI, and when DHS tipped off the USDA about irregularities noticed by the department.

The USDA funds the Child and Adult Care Feeding Program, a component of which provides free meals to at-risk children during after-school hours, and the Summer Feeding Service Program, which provides free meals to qualifying children during summer school. Sponsors who want to participate must apply to DHS. Once approved, the sponsors can provide meals for which they are later reimbursed on the basis of the number of qualifying meals served.

The 76-count indictment charges all three women with conspiring to fraudulently obtain USDA program funds. Mills is also charged with wire fraud, paying bribes and money laundering. King and Hatton are also charged with accepting bribes. The fraud charges are each punishable by up to 20 years in prison and a fine of up to $250,000, while the other charges are each punishable by up to 10 years in prison and a fine of up to $250,000.

All three women appeared briefly in court Thursday afternoon, with attorneys entering innocent pleas on their behalf. U.S. Magistrate Judge Beth Deere set a tentative trial date for all three for Jan. 20 before U.S. District Judge Susan Webber Wright and allowed each to remain free until trial without posting bond, after prosecutors didn't object.

Mills appeared first, flanked by attorneys Jack Kearney and Ron Davis. Later in the afternoon, King and Hatton followed suit, with King represented by attorney Molly Sullivan, an assistant federal public defender, and Hatton by Little Rock attorney Stuart Vess. No one spoke to reporters.

Earlier in the day, Thyer began a news conference announcing the women's arrests by noting that it is the holiday season, during which "Christians all over the world and particularly here in Arkansas will celebrate the birth of a child, Jesus," whose teachings as an adult were recorded in the Bible. He then read aloud two verses from the Book of Matthew, including 19:13-14, which says in part, "the kingdom of heaven belongs to people like these," referring to children, and 25:35-40, in which Jesus tells his disciples that in feeding and caring for "the least of these brothers and sisters of mine, you have done it for me."

"These ideas are not exclusive to Christianity," Thyer said, noting that other religions have similar teachings and that the federal government programs that were defrauded "comport us well to these teachings."

"The basic idea behind both of these federally funded programs is simple: Children should not go hungry," Thyer said. "Let me say that again: Children should not go hungry."

He said the state of Arkansas received more than $66 million in federal funds in 2013-2014 for providing food through after-school programs that serve meals or snacks to children in low-income areas. In 2014, he said, the state received more than $11 million in federal funds for the Summer Feeding Program, which was established to ensure that children in low-income areas receive nutritious meals when school isn't in session.

Citing statistics from the Summer Feeding Program, Thyer said 15 percent of Arkansas children who qualify for free or reduced-price school lunches don't get the same high-quality meals during the summer and that the program tries to "fill this gap by providing the funding for up to three nutritious meals and snacks per day."

Together, the two feeding programs " complement the government's free and reduced lunch program during the school day," Thyer said. Both feeding programs are part of the USDA's Food and Nutrition Service's Child Nutrition Programs.

Both private nonprofit and for-profit organizations can participate as sponsors in the after-school program, while only nonprofits are eligible to be sponsors in the summer program, according to the indictment.

Thyer said that sponsor organizations must submit a proposed budget to DHS containing the expected number of children to be fed and the location where the food will be given to the children. After the department reviews and approves a proposed budget, the organization purchases and prepares the meals. The organization later submits claims to DHS detailing the number of eligible meals prepared and provided, and the department pays the organization by multiplying the number of meals served by the reimbursement rate.

In Arkansas, he said, 151 sponsor organizations serve 641 sites in the after-school program, and 222 sponsor organizations serve 1,374 sites in the summer program.

Thyer said that between August of 2011 and August of this year, Mills received more than $2.5 million from DHS through her "various entities," by greatly inflating the number of eligible meals served or simply not serving meals at all. The indictment says Mills was a sponsor for the programs through R & J's After-School At-Risk Program and King Solomon and was associated with Lamar's Angels Haven, which had approved sites in cities including Helena-West Helena and Marianna.

In January 2012, Mills began making unauthorized payments by check to Hatton, and in March 2013 to King, the indictment states.

The indictment says that beginning in March 2013, a person identified only as "Unindicted Co-conspirator A" sent unauthorized checks to Hatton and King after submitting false applications that the women approved. On checks that Mills or the unidentified co-conspirator sent to Hatton and King, the "memo" line was either left blank or had a notation such as "supplies," "office furniture," "afterschool purchase" or "mileage."

In response to the fraudulent activity uncovered, the department's Special Nutrition Unit has taken steps to strengthen its oversight capacity, according to department spokesman Amy Webb. She said the steps include adding five fraud investigators and three senior auditors, seeking monitoring help from the USDA, implementing new policies aimed at improving training and program management, and further segregating job duties to ensure that the employee approving billing isn't also responsible for monitoring the program.

Information for this article was contributed by Nikki Wentling of the Arkansas Democrat-Gazette.

A section on 12/19/2014

Upcoming Events